J.P. Morgan Chase reported this morning that second quarter credit card profits declined 13% year-on-year to $759 million, compared to $765 million in the prior quarter and $875 million in the year-ago quarter. End-of-period managed loans of $148 billion increased by $8.7 billion, or 6%, from the prior year and increased by $1.4 billion, or 1%, from the prior quarter. Net interest income of $3.0 billion was flat compared with the prior year. Net interest income was negatively affected by the discontinuation of certain billing practices (including the elimination of certain over-limit fees and the two-cycle billing method for calculating finance charges); higher charge-offs, which resulted in increased revenue reversals; and increased cost of funds on growth in introductory and transactor balances. These decreases in net interest income were offset by increased average loans and higher fees. Charge volume of $88.0 billion increased by $3.6 billion, or 4%, from the prior year. Net accounts opened during the quarter were 3.7 million. Merchant processing volume of $179.7 billion increased by $13.4 billion, or 8%, and total transactions of 4.8 billion increased by 335 million, or 7%, from the prior year. During the quarter Chase launched the “ShopRite Rite-Rewards MasterCard,” “ShopRite Private Label Credit Card” and “PriceRite Private Label Credit Card” with Wakefern Food. Chase also renewed several partner relationships including Southwest Airlines and the United States Postal Service Employee Affinity Card Program. For complete details on Chase’s second quarter performance, visit CardData ([www.carddata.com]).
JPM CHASE HISTORICAL ($billions)
2Q/06 3Q/06 4Q/06 1Q/07 2Q/07
EOP Outstandings: $139.3 143.8 152.8 146.6 148.0
Charge Volume: $ 84.4 87.5 93.4 81.3 88.0
Source: CardData (www.carddata.com)